If you control hashrate majority you can do bad things like change the past. You can reverse transactions. That's not supposed to happen. This is the Achilles heel of Bitcoin.
The Ghash pool used their hashpower to scam a casino. So people absolutely should fear centralization of hashpower. Ghash later said it was a rogue employee that did this and that this person no longer worked for them.
Rational miners, as long as they still hold bitcoin or equipment to mine bitcoin, would not do things to hurt Bitcoin as it would hurt their own interests. Therefore many people assume that if hashpower becomes too centralized then miners will move to another pool and decentralize it on their own, to protect their own interests.
Rational pool operators would also voluntarily give up some hashpower to keep Bitcoin safe, for instance by raising their fees so that some miners will leave. This is the rational choice, the pool operator would do this to protect their own interests. This is what BTCGuild did when they were growing too large.
Unfortunately neither of these things happened. Ghash said it was not fair that they should be punished for being too successful. Their miners also did not leave on their own. Ghash had too much hashpower for a long time.
Three pools so far have become too large on their own. Deepbit, BTCGuild and Ghash. Only BTCGuild raised fees to reduce their own size. In each case a small handful of miners acted responsibly, but their hashpower was not enough to make a difference.
Some people think the problem is that a single pool becomes too big. I've heard the suggestion "why doesn't Ghash just make a second pool?" Of course that would not change anything at all, as they would still control all that hashpower. In fact it would make things worse as it becomes more difficult to see who controls what amount of hashpower.
As I write this Ghash has shut down their pool just a few days ago, and it has been a long time since they were too large. The problem now is China. Over two thirds of hashpower is now in China. This basically means that the Chinese government controls Bitcoin to some degree. They could require pools to filter certain transactions, or even reverse transactions mined by non-Chinese pools. The solution to this problem is not obvious since much of that hashpower is physically situated in China. But again very few are talking about this problem and even fewer are trying to do something about it.
So, what to make of all this? Kudos to Eleuthria who acted responsibly when his pool BTCGuild became too large, and kudos to the few miners who move when their pool becomes too large. However, as a rule, it seems most people do not care if they create a dangerous situation for Bitcoin, even if that puts the value of their own bitcoins at risk. We can only speculate as to why people's behavior does not appear more rational. As a pool operator I have noticed that miners knew a lot more about Bitcoin when I started my pool in 2011 than they do now in 2016. So I have a feeling much of the reason is ignorance.
It is also interesting to note that when Bitcoin is in a risky situation like this there is very little news or discussion about it, and the bitcoin price does not seem to be affected by it either. Even when an employee at Ghash used the pool to steal from a casino there was no reaction in bitcoin news or price. After seeing this I believe it would take some very bad things to happen before news or market would react. After that miners and pool operators would probably act more responsibly, but it would be a little late in my opinion.